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Panama President May Veto Crypto Regulation Legislation
The bill was approved by the country's legislature in April.
Updated May 11, 2023, 3:35 p.m. Published May 19, 2022, 6:10 p.m.
Panama President Laurentino Cortizo on Wednesday said he may veto a recently approved bill that would allow citizen to use cryptocurrencies as a form of payment in the Central American country.
Though describing the bill as a “good law,” Cortizo – speaking at a Bloomberg event – said that with the current information he has, he’s inclined not to give his signature.
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“I have to be very careful if the law has clauses related to money laundering activities or anti-money laundering activities,” Cortizo said. “That is very important for us.”
He noted that his country has been trying to get removed from the Financial Action Task Force's (FATF) "grey list," which means the global anti-money laundering group monitors a country more closely after it identifies a deficiency in that country's money laundering and counter-terrorism financing controls.
In March, the FATF urged Panama to produce an “action plan” to address its concerns by June.
The crypto bill – presented by the Panamanian Congressman Gabriel Silva and approved during a plenary session of the Legislative Assembly by a 40-0 vote on April 28 – requires the signature of Cortizo to become law. His decision is due no later than 30 days after passage.
Although the legislation doesn't allow for any cryptocurrency to become legal tender, it makes possible the free use of crypto as a means of payment for any transaction. It also allows digital asset companies to establish operations in the country and treats crypto assets as foreign-source income, which – in accordance with Panama's territorial taxation system – means no taxes on capital gains.
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